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Gratuity Calculator

₹
Years
Months

Your Gratuity Amount

₹2,88,462

Effective Years

10 Years

Formula Divisor

26 Days

Gratuity Calculator — Overview

A Gratuity Calculator helps employees estimate the gratuity amount they are entitled to receive upon resignation, retirement, or termination. Gratuity is a statutory benefit governed by the Payment of Gratuity Act, 1972 in India, applicable to employees who have completed at least 5 years of continuous service.

The calculator supports both employees covered under the Act (uses 26 working days) and those not covered (uses 30 calendar days), ensuring accurate results for all scenarios.

How is it calculated?

Enter your last drawn monthly salary (Basic + Dearness Allowance) and the number of completed years of service.


Under the Gratuity Act:

Gratuity = (Last Drawn Salary x 15 x Years of Service) / 26


Not under the Gratuity Act:

Gratuity = (Last Drawn Salary x 15 x Years of Service) / 30


Note: The maximum tax-exempt gratuity is capped at Rs 20 lakh under current rules. If service in the last year exceeds 6 months, it is rounded up to the next full year.

Frequently Asked Questions

An employee must have completed at least 5 years of continuous service to be eligible for gratuity under the Payment of Gratuity Act. However, this requirement is waived in cases of death or disability.

The maximum tax-exempt gratuity amount is Rs 20 lakh for private sector employees. For central government employees, the limit is Rs 25 lakh. Any amount exceeding this is taxable as income.

Gratuity is calculated on the last drawn salary, which includes Basic Salary plus Dearness Allowance (DA). It does not include HRA, bonuses, overtime pay, or other allowances.

If you resign before completing 5 years of continuous service, you are generally not entitled to gratuity under the Act. However, some employers may offer gratuity as part of company policy even for shorter tenures.

For government employees, gratuity is fully tax-exempt. For private sector employees covered under the Act, gratuity up to Rs 20 lakh is exempt from income tax. Any excess amount is taxable at your applicable income tax slab rate.

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